Financial Review: George Weston (OTCMKTS:WNGRF) & Costco Wholesale (NASDAQ:COST)

George Weston (OTCMKTS:WNGRF) and Costco Wholesale (NASDAQ:COST) are both large-cap consumer staples companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, valuation, dividends, institutional ownership, profitability and risk.

Analyst Recommendations

This is a summary of recent ratings and price targets for George Weston and Costco Wholesale, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
George Weston	0	1	4	0	2.80
Costco Wholesale	1	9	23	1	2.71

Costco Wholesale has a consensus price target of $1,091.84, suggesting a potential upside of 2.41%. Given Costco Wholesale’s higher possible upside, analysts clearly believe Costco Wholesale is more favorable than George Weston.

Dividends

George Weston pays an annual dividend of $0.93 per share and has a dividend yield of 1.2%. Costco Wholesale pays an annual dividend of $5.88 per share and has a dividend yield of 0.6%. George Weston pays out 50.0% of its earnings in the form of a dividend. Costco Wholesale pays out 28.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Costco Wholesale has increased its dividend for 22 consecutive years.

Insider & Institutional Ownership

0.0% of George Weston shares are held by institutional investors. Comparatively, 68.5% of Costco Wholesale shares are held by institutional investors. 53.6% of George Weston shares are held by insiders. Comparatively, 0.1% of Costco Wholesale shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

George Weston has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500. Comparatively, Costco Wholesale has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500.

Profitability

This table compares George Weston and Costco Wholesale’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
George Weston	1.54%	14.12%	3.38%
Costco Wholesale	3.04%	27.60%	10.63%

Earnings & Valuation

This table compares George Weston and Costco Wholesale”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
George Weston	$46.17 billion	0.62	$817.33 million	$1.86	41.56
Costco Wholesale	$303.15 billion	1.56	$9.23 billion	$20.76	51.36

Costco Wholesale has higher revenue and earnings than George Weston. George Weston is trading at a lower price-to-earnings ratio than Costco Wholesale, indicating that it is currently the more affordable of the two stocks.

Summary

Costco Wholesale beats George Weston on 15 of the 18 factors compared between the two stocks.

About George Weston

George Weston Limited is a Canadian holding company whose principal businesses are food and drug retailing and commercial real estate. Its portfolio includes Loblaw Companies Limited, which operates grocery stores and pharmacies and offers related financial services, and Choice Properties REIT, a real estate owner and operator with retail, industrial and mixed-use properties. The company traces its roots to 1882, when founder George Weston began a bakery business in Toronto. It expanded into food manufacturing and retail over time and later reorganized its operations around its current principal businesses.

About Costco Wholesale

Costco Wholesale Corporation operates membership-based warehouse clubs that offer a broad selection of merchandise at generally low prices. Its products include groceries, fresh foods, appliances, electronics, apparel, furniture, and household goods, as well as its Kirkland Signature private-label line. The company also provides services such as gasoline stations, pharmacies, optical and hearing-aid centers, food courts, and travel offerings. Costco serves members through warehouses and online channels.